SurgLine International Inc (SGLN)

[mm107]

Of course, Once the 3 days passes, any shares that are in your account are "REAL".

Even if they are an IOU, once accounting goes into effect, if there is more shares out then really available, they are forced to bought back.

this is what happened to Volkswagen which is known to be the GREATEST SHORT SQUEEZE IN HISTORY and CAUSED SEVERAL HEDGE FUND OPERATORS TO COMMIT SUICIDE IN THE LOSSES FROM THEIR SHORT SELLS.

THIS IS WHY WHEN I HEAR, "OH SHORTING DOESNT HAPPEN" WAKE UP! VOLKSWAGEN WAS A .PK!!!

What basically happened whats

Volkwagen was approached by Porse to buy Shares, to help the shorts (believe it or not Shorts have the balls to call people and make deals to stop shorting). So basically Porshe agreed to sell 5% of their holdings in Volkswagon, let the shorts cover and buy more volkswagen.

Over the weeks, Porshe increased their holdings from 35% to 42% and had the option to buy another 31%....

In German Law, Porshe never has to disclose what it is doing, they have to file as beneficial owners, but never a REASON of WHY.



SO AS THE MASSIVE CROWD OF SHORT SELLERS WERE CRUSHING VOLKSWAGEN WITH SHORT AND NAKED SHORT SALES. THEY NEVER ACCOUNTED FOR PORSHE TO OWN A HUGE CHUNK OF VOLKSWAGEN.

THIS NAKED SHORT CAUSED THE WORLD BEST SHORT SQUEEZE AND MADE VOLKSWAGEN THE HIGHEST MARKET CAPS IN THE ENTIRE WORLD ON THE SQUEEZE DAY...


NOTICE THE NAMES INVOLVED WIT THE SHORTS, GOLDMAN SACHS, LEHMAN, ETC....




http://seekingalpha.com/article/103073-volkswagen-saga-major-short-squeeze



We are obviously not involved with this "greatest short squeeze in history" as Volkswagen (VLKAY.PK) is on a German exchange and I wouldn't touch something this random and crazy with your 10 foot pole but some interesting developments - first Porsche (which is trying to buy shares of Volkswagen) agreed to sell 5% of their stake to let some shorts cover. Already their investment might go down as one of the greatest ever at the prices they are going to be able to sell at.

* Porsche Automobil Holding (POAHF.PK) on Wednesday said it would sell up to 5% of its stake in Volkswagen AG to meet unprecedented demand for the Wolfsburg automaker's stock after arguably the biggest short squeeze in stock-market history.
* The move's designed "to avoid further market distortions and the resulting consequences for those involved," Porsche said -- but laid the blame for this week's massive rise in VW shares squarely with the short sellers themselves.
* The scramble for Volkswagen shares, already apparent during the last two months, intensified when Porsche over the weekend revealed that it had increased its equity stake in VW to 42.6% from about 35%, and more crucially, that it had options to buy another 31.5%.
* Porsche shares vaulted higher, rallying 35% as the luxury automaker's market capitalization reflects just a fraction of the valuation of its VW holding.
* The stake sale could lead to profits of roughly 1.5 billion euros, Commerzbank analysts said, estimating that Porsche's strike price was 100 euros and that the VW shares are sold at 200 euros each. (nice trade!)

Second, and more interesting are

some of the names involved on the short side

- again some of the "best of the best" in hedge fund world are getting blown up on this trade. It is really amazing to see these same names in so many stories of similar ilk - SAC and Highside are among the largest and Greenlight is run by a respected value guy who is supposed to be conservative. Live by the sword, die by the sword I suppose. Goldman Sachs (GS) and Morgan Stanley (MS) both denied they were involved in this but their stock prices were hammered Tuesday before the denials - somehow I think where there is smoke, there is fire especially with Government Sachs. If you see so many of your customers in on a trade - I doubt as a prime broker your trading desk is NOT piggy backing. But that's ok, our tax payer money will make sure they offset any losses at the banks.

* Hedge funds around the world absorbed a punishing blow Tuesday, as soaring shares in Germany's Volkswagen AG created one of the biggest losses from a single bet in recent memory.
* The funds are expected to face billions of dollars in losses, according to prime brokers familiar with the positions, because they were wagering that VW shares would fall. Instead, shares of the big German auto maker soared 82% Tuesday. VW shares are up 348% over the past two days and 267% in the past month -- as short sellers rushed to pay ever-higher prices for shares they need to exit from positions.
* Those affected by the moves include Greenlight Capital, SAC Capital, Glenview Capital, Marshall Wace, Tiger Asia, Perry Capital and Highside Capital, according to people familiar with the funds.
* With VW shares pushing astronomical levels, some hedge funds are calling foul. They are accusing Porsche, already a 42.6% VW holder, of misleading them about its intent to gain full control of VW. (hold on while I shed a tear here.... kind of reminds me of the investment banks crying foul on naked short selling; something they and their clients benefited from for years - but when it was turned on them they cried about it) On Sunday, Porsche disclosed it held so-called cash-settled options to potentially acquire another 31.5% of VW, which could give it a near-75% stake in the German auto giant. Many funds had been focused on Porsche's previous statements, which they say suggested Porsche would not make such a move.
* Some of these firms say they are writing letters to regulators or are considering doing so, asking that Porsche's actions be examined. (hedge funds to regulators: "we demand a bailout")
* "The biggest problem is that Porsche appears to control over 70% of Volkswagen and didn't have to disclose that fact," a move that would have to be disclosed in most developed markets, says Max Warburton, an analyst at Bernstein Research. "Under German law they don't have to disclose what they're doing, but earlier this year they put out a press release denying speculation that they would build" their Volkswagen stake to these levels.
* Although investors in Germany must disclose when they accumulate a stake of as little as 3% in a public company, they aren't required to report certain options that track a stock's movements but don't give a holder an underlying vote. (I just find the kettle calling something black hilarious - "lack of public disclosure" claims by hedge funds? hah - if the rules are too vague then don't play on that jungle gym)